* Net Income Increases 20% * Net Margin Of 2.1%, Up 40 Basis Points * 2002 EPS Outlook Raised to $1.15 - $1.17
FORT LAUDERDALE, Fla., July 25 /PRNewswire-FirstCall/ -- AutoNation, Inc. (NYSE:AN), America's largest retailer of both new and used vehicles, today reported record second-quarter earnings per share of $0.32, up
23% from $0.26 a year earlier, as higher gross margin, lower inventory-
carrying costs and the elimination of goodwill amortization drove results.
Net income also rose 20% to $103.8 million from $86.3 million last year.
Last year's results include two cents of net gain resulting primarily from
the sale of the Company's Flemington Group of dealerships. On a comparable
basis -- after excluding the net gain and approximately
$14 million, or $0.04 per share, of after-tax goodwill amortization from last
year's results -- the Company's second-quarter earnings per share rose 14%
($0.32 versus $0.28).
Commenting on the 2002 second-quarter performance, Mike Jackson,
AutoNation's Chief Executive Officer, said, "AutoNation delivered another
record quarter of earnings per share, demonstrating again the strength of our
operations. We continue to benefit from lower inventory-carrying costs, a
diverse portfolio of vehicle brands and local markets, and significant profits
from higher-margin areas such as finance and insurance and parts and service."
Total revenue for the second quarter ended June 30, 2002 increased to
$5.02 billion from $4.95 billion a year ago as total revenue grew 9.2% for
finance and insurance, 3.9% for parts and service, 2.7% for used vehicles and
1.3% for new vehicles. Total gross margin increased to $750.6 million, up
from $723.1 million last year as gross margin percentage rose 40 basis points
to 15%. Net margin rose 40 basis points to 2.1%.
The Company also reported that in accordance with new accounting rules it
performed a required impairment analysis of its goodwill and other intangibles
that resulted in no adjustments.
Other Company highlights in the second quarter included:
- The signing of an agreement to acquire Claridge's BMW in Fremont,
Calif. The acquisition is expected to close during this year's third
quarter. In 2001, Claridge's BMW had revenue of approximately $63
million.
- Record earnings before interest, taxes, depreciation and amortization
of $195.1 million, up 5.7% from last year's $184.5 million.
- The repurchase of 7 million of the Company's shares at a cost of $115.2
million, leaving a board-authorized amount of $109.2 million for future
repurchases.
Looking ahead, Mr. Jackson said, "Based on our continued confidence in our
operations and the U.S. vehicle market's relative health, we're raising our
full-year 2002 outlook for earnings per share to the range of $1.15 to $1.17
and expect our third-quarter earnings per share to be in the range of $0.28 to
$0.30."
For the six-month period ended June 30, 2002, the Company earned net
income of $195.5 million, or $0.60 per share, up 34% from net income of $146.2
million, or $0.43 per share, in the prior year. The Company's revenue during
the six-month period ended June 30, 2002 totaled $9.77 billion, down from
revenue of $9.83 billion during the prior year.
AutoNation will discuss its 2002 second-quarter results, its earnings
outlook and supporting assumptions later this morning during an 11 a.m.,
Eastern Time, conference call. To listen live to the conference call, dial
877-209-9922 or listen via the audio webcast offered at http://www.AutoNation.com by
viewing the "About AutoNation, Inc." section and clicking on the webcast link.
A playback of the conference call will be available after 4:30 p.m., Eastern
Time, through August 9, 2002. Playbacks can be accessed by calling
800-475-6701 (access code 642312) or by visiting http://www.AutoNation.com and
accessing the "Investors" section found under "About AutoNation, Inc."
ABOUT AUTONATION, INC.
AutoNation, Inc., headquartered in Fort Lauderdale, Fla., is America's
largest retailer of both new and used vehicles. Ranked #101 on the 2002
Fortune 500 survey of America's largest corporations, AutoNation employs
approximately 30,000 people and owns and operates 373 automotive retail
franchises in 17 states. For additional information, please visit
http://www.AutoNation.com, where consumers can find more than 100,000 vehicles
available for sale.
FORWARD-LOOKING STATEMENTS
Certain statements and information included in this release constitute
"forward-looking statements" within the meaning of the Federal Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied in such forward-looking statements. Additional discussion
of factors that could cause actual results to differ materially from
management's projections, estimates and expectations is contained in the
Company's SEC filings. The Company undertakes no duty to update its forward-
looking statements, including its earnings outlook.
AUTONATION, INC.
UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTS
(In millions, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
Revenue:
New vehicle $2,980.2 $2,941.2 $5,793.3 $5,808.9
Used vehicle 998.7 972.4 1,945.7 1,949.5
Parts and service 622.6 599.5 1,234.5 1,201.0
Finance and insurance 133.4 122.2 254.5 233.7
Other 280.7 309.7 538.3 639.5
Total revenue 5,015.6 4,945.0 9,766.3 9,832.6
Cost of operations:
New vehicle 2,763.0 2,734.1 5,372.4 5,408.3
Used vehicle 893.5 860.8 1,732.0 1,730.9
Parts and service 349.9 339.2 697.0 682.9
Other 258.6 287.8 492.6 594.9
Total cost of operations 4,265.0 4,221.9 8,294.0 8,417.0
Gross margin 750.6 723.1 1,472.3 1,415.6
Selling, general and
administrative expenses 555.6 544.5 1,103.7 1,094.6
Depreciation 16.9 16.4 32.6 32.0
Amortization 0.8 20.4 1.4 40.4
Loan and lease underwriting
losses (income), net (2.7) 7.0 (2.9) 7.6
Restructuring and impairment
losses, net 1.2 5.4 1.2 4.6
Other losses (income) 0.7 (19.0) 1.1 (19.0)
Operating income 178.1 148.4 335.2 255.4
Other interest expense, net (9.3) (6.2) (17.7) (15.8)
Other expense (0.7) (0.7) (0.9) (0.8)
Income before income taxes 168.1 141.5 316.6 238.8
Provision for income taxes 64.3 55.2 121.1 92.6
Net income $103.8 $86.3 $195.5 $146.2
Diluted earnings per share $0.32 $0.26 $0.60 $0.43
Weighted average common and
common equivalent shares
outstanding 328.8 337.0 327.4 340.7
Common shares outstanding 318.5 333.1 318.5 333.1
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA
($ in millions, except gross margin per vehicle data)
Operating Highlights
Three Months Ended June 30,
2002 2001 $Variance %Var.
Revenue:
New vehicle $2,980.2 $2,941.2 $39.0 1.3
Used vehicle 998.7 972.4 26.3 2.7
Parts and service 622.6 599.5 23.1 3.9
Finance and insurance 133.4 122.2 11.2 9.2
Other 280.7 309.7 (29.0) (9.4)
$5,015.6 $4,945.0 $70.6 1.4
Gross margin:
New vehicle $217.2 $207.1 $10.1 4.9
Used vehicle 105.2 111.6 (6.4) (5.7)
Parts and service 272.7 260.3 12.4 4.8
Finance and insurance 133.4 122.2 11.2 9.2
Other 22.1 21.9 0.2 0.9
750.6 723.1 27.5 3.8
S,G&A - Store 520.7 511.3 (9.4) (1.8)
Store performance 229.9 211.8 18.1 8.5
S,G&A - Corporate 34.9 33.2 (1.7) (5.1)
Depreciation 16.9 16.4 (0.5) --
Amortization 0.8 20.4 19.6 --
Loan and lease underwriting losses
(income), net (2.7) 7.0 9.7 --
Restructuring and impairment losses,
net 1.2 5.4 4.2 --
Other losses (income) 0.7 (19.0) (19.7) --
Operating income $178.1 $148.4 $29.7 20.0
Retail vehicle sales:
New 110,138 112,059 (1,921) (1.7)
Used 64,745 64,410 335 0.5
174,883 176,469 (1,586) (0.9)
Gross margin per vehicle retailed:
New $1,972 $1,848 $124 6.7
Used $1,625 $1,733 $(108) (6.2)
Finance and insurance $763 $692 $71 10.3
Six Months Ended June 30,
2002 2001 $Variance %Var.
Revenue:
New vehicle $5,793.3 $5,808.9 $(15.6) (0.3)
Used vehicle 1,945.7 1,949.5 (3.8) (0.2)
Parts and service 1,234.5 1,201.0 33.5 2.8
Finance and insurance 254.5 233.7 20.8 8.9
Other 538.3 639.5 (101.2) (15.8)
$9,766.3 $9,832.6 $(66.3) (0.7)
Gross margin:
New vehicle $420.9 $400.6 $20.3 5.1
Used vehicle 213.7 218.6 (4.9) (2.2)
Parts and service 537.5 518.1 19.4 3.7
Finance and insurance 254.5 233.7 20.8 8.9
Other 45.7 44.6 1.1 2.5
1,472.3 1,415.6 56.7 4.0
S,G&A - Store 1,033.7 1,020.7 (13.0) (1.3)
Store performance 438.6 394.9 43.7 11.1
S,G&A - Corporate 70.0 73.9 3.9 5.3
Depreciation 32.6 32.0 (0.6) --
Amortization 1.4 40.4 39.0 --
Loan and lease underwriting losses
(income), net (2.9) 7.6 10.5 --
Restructuring and impairment losses,
net 1.2 4.6 3.4 --
Other losses (income) 1.1 (19.0) (20.1) --
Operating income $335.2 $255.4 $79.8 31.2
Retail vehicle sales:
New 213,945 221,064 (7,119) (3.2)
Used 127,570 128,935 (1,365) (1.1)
341,515 349,999 (8,484) (2.4)
Gross margin per vehicle retailed:
New $1,967 $1,812 $155 8.6
Used $1,675 $1,695 $(20) (1.2)
Finance and insurance $745 $668 $77 11.5
Operating Percentages
Three Months Six Months
Ended June 30, Ended June 30,
%2002 %2001 %2002 %2001
Revenue mix percentages:
New vehicle 59.4 59.5 59.3 59.1
Used vehicle 19.9 19.7 19.9 19.8
Parts and service 12.4 12.1 12.6 12.2
Finance and insurance 2.7 2.5 2.6 2.4
Other 5.6 6.2 5.6 6.5
100.0 100.0 100.0 100.0
Operating items as a percentage of revenue:
Gross margin:
New vehicle 7.3 7.0 7.3 6.9
Used vehicle 10.5 11.5 11.0 11.2
Parts and service 43.8 43.4 43.5 43.1
Finance and insurance 100.0 100.0 100.0 100.0
Other 7.9 7.1 8.5 7.0
Total 15.0 14.6 15.1 14.4
S,G&A - Store 10.4 10.3 10.6 10.4
Store performance 4.6 4.3 4.5 4.0
S,G&A - Corporate 0.7 0.7 0.7 0.8
Operating income 3.6 3.0 3.4 2.6
Net income 2.1 1.7 2.0 1.5
Other operating items as a
percentage of total gross margin:
S,G&A - Store 69.4 70.7 70.2 72.1
Store performance 30.6 29.3 29.8 27.9
S,G&A - Corporate 4.6 4.6 4.8 5.2
Total S,G&A 74.0 75.3 75.0 77.3
Operating income 23.7 20.5 22.8 18.0
Cash Flow Information
Three Months Six Months
Ended June 30, Ended June 30,
2002 2001 2002 2001
EBITDA $195.1 $184.5 $368.3 $327.0
Capital expenditures,
excluding property operating
lease buy-outs $31.3 $28.8 $60.0 $46.5
Property operating
lease buy-outs $5.4 $-- $5.4 $6.3
Stock repurchases $115.2 $30.9 $151.1 $129.1
Acquisitions $3.9 $11.2 $131.6 $33.2
Proceeds from exercises of
stock options $54.5 $0.4 $74.7 $0.4
Floorplan
Assistance Three Months Ended June 30, Six Months Ended June
and Expense 2002 % 2001 % 2002 % 2001 %
New vehicle
gross margin,
before
floorplan $202.2 6.8 $205.3 7.0 $394.6 6.8 $406.4 7.0
Floorplan
assistance 33.5 1.1 36.7 1.2 63.0 1.1 74.6 1.3
Floorplan
interest
expense (18.5) (0.6) (34.9) (1.2) (36.7)(0.6) (80.4) (1.4)
New vehicle
gross margin,
as presented $217.2 7.3 $207.1 7.0 $420.9 7.3 $400.6 6.9
Balance Sheet and Other Highlights
June 30, 2002 December 31, 2001 June 30, 2001
Cash and cash
equivalents $100.2 $128.1 $28.5
Inventory $2,507.3 $2,178.5 $2,443.6
Floorplan notes
payable $2,142.3 $1,900.7 $2,110.1
Non-vehicle
debt $649.4 $655.2 $698.1
Equity $3,949.9 $3,827.9 $3,858.5
Days supply
(trailing 30 days):
New 66 days 61 days 59 days
Used 38 days 35 days 36 days
AUTONATION, INC.
UNAUDITED SAME STORE DATA
($ in millions, except gross margin per vehicle data)
Three Months Ended June 30,
2002 2001 $ Variance % Variance
Revenue:
New vehicle $2,884.9 $2,932.4 $(47.5) (1.6)
Used vehicle 962.9 970.1 (7.2) (0.7)
Parts and service 602.1 594.8 7.3 1.2
Finance and insurance 130.0 120.7 9.3 7.7
Other 263.9 304.4 (40.5) (13.3)
$4,843.8 $4,922.4 $(78.6) (1.6)
Gross margin:
New vehicle $209.5 $206.9 $2.6 1.3
Used vehicle 101.9 110.3 (8.4) (7.6)
Parts and service 263.3 258.6 4.7 1.8
Finance and insurance 130.0 120.7 9.3 7.7
Other 18.8 19.3 (0.5) (2.6)
723.5 715.8 7.7 1.1
S,G&A - Store 501.2 509.1 7.9 1.6
Store performance $222.3 $206.7 $15.6 7.5
Retail vehicle sales:
New 107,845 111,640 (3,795) (3.4)
Used 63,502 64,210 (708) (1.1)
171,347 175,850 (4,503) (2.6)
Gross margin per
vehicle retailed:
New $1,943 $1,853 $90 4.9
Used $1,605 $1,718 $(113) (6.6)
Finance and insurance $759 $686 $73 10.6
Six Months Ended June 30,
2002 2001 $ Variance % Variance
Revenue:
New vehicle $5,637.5 $5,741.2 $(103.7) (1.8)
Used vehicle 1,893.5 1,926.6 (33.1) (1.7)
Parts and service 1,201.8 1,181.8 20.0 1.7
Finance and insurance 248.9 231.0 17.9 7.7
Other 509.0 614.3 (105.3) (17.1)
$9,490.7 $9,694.9 $(204.2) (2.1)
Gross margin:
New vehicle $408.2 $396.7 $11.5 2.9
Used vehicle 208.7 216.4 (7.7) (3.6)
Parts and service 522.4 510.1 12.3 2.4
Finance and insurance 248.9 231.0 17.9 7.7
Other 38.1 38.0 0.1 0.3
1,426.3 1,392.2 34.1 2.4
S,G&A - Store 1,001.1 1,003.7 2.6 0.3
Store performance $425.2 $388.5 $36.7 9.4
Retail vehicle sales:
New 210,010 218,428 (8,418) (3.9)
Used 125,592 127,395 (1,803) (1.4)
335,602 345,823 (10,221) (3.0)
Gross margin per
vehicle retailed:
New $1,944 $1,816 $128 7.0
Used $1,662 $1,699 $(37) (2.2)
Finance and
insurance $742 $668 $74 11.1
Operating Percentages
Three Months Six Months Ended
Ended June 30 Ended June 30,
%2002 %2001 %2002 %2001
Revenue mix percentages:
New vehicle 59.6 59.6 59.4 59.2
Used vehicle 19.9 19.7 20.0 19.9
Parts and service 12.4 12.1 12.7 12.2
Finance and insurance 2.7 2.5 2.6 2.4
Other 5.4 6.1 5.3 6.3
100.0 100.0 100.0 100.0
Operating items as a
percentage of revenue:
Gross margin:
New vehicle 7.3 7.1 7.2 6.9
Used vehicle 10.6 11.4 11.0 11.2
Parts and service 43.7 43.5 43.5 43.2
Finance and
insurance 100.0 100.0 100.0 100.0
Other 7.1 6.3 7.5 6.2
Total 14.9 14.5 15.0 14.4
S,G&A - Store 10.3 10.3 10.5 10.4
Store performance 4.6 4.2 4.5 4.0
Other operating items
as a percentage of
total gross margin:
S,G&A - Store 69.3 71.1 70.2 72.1
Store performance 30.7 28.9 29.8 27.9
SOURCE AutoNation, Inc.
CONTACT: Oscar Suris of AutoNation, Inc., +1-954-769-3576, or
suriso@autonation.com
URL: http://www.autonation.com
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